Calgary office market report

Class AA office activity continues to power the downtown market

Despite strong absorption amongst the top tier of office class, downtown vacancy remained relatively flat in Q2. Slower lease-up activity in the suburbs led to a second straight quarter of negative absorption.
 

Calgary area office market trends

01. Best-in-class buildings are main market drivers

Class AA vacancy is approaching 10%, driven by a strong preference for high-quality office spaces with distinct amenities. Notably, East Village vacancy decreased by 8.7%, a substantial drop compared to Q1 2024. This was mainly caused by Cenovus reclaiming and withdrawing 392,000 sf in The Bow, which significantly impacted sublease availability in premier office segments.

02. Successful Stampede showcases the city

The annual Calgary Stampede continues to attract numerous visitors to the city. This year, the event set a new attendance record with nearly 1.5 million participants, driven by population growth and increased migration to Alberta, which is projected to see a 9% increase over the next three years.

This influx of visitors and residents has provided Calgary a significant economic boost, enabling further development and expansion. Notable projects include the newly renovated BMO Centre and the Arts Commons building.
The popularity of the Calgary Stampede enhances the city's appeal as a desirable place to work, increasing the demand for high-quality office space as tenants seek premium leasing options throughout Calgary.

03. Conversion program continuing to expand

Under Calgary's Downtown Development Incentivization Program, several office-to-residential conversion projects are underway. The Cornerstone is the first completed project, adding 112 two and three-bedroom apartments to the west end of downtown, 70% of which are already leased.

Other significant projects, such as Eau Claire Place I & II and the Petrofina building, are progressing well and are scheduled for completion in the spring of 2025.